thinkbroadband

IoD calls for a 10 Gbps for everyone vision for 2030
Monday 29 February 2016 13:11:58 by
Andrew Ferguson

The UK Government with its superfast targets and by implication the large providers like BT, Virgin Media and KC are once more in the spotlight, the Institute of Directors has published a policy paper calling for a nationwide roll-out of 10 Gbps broadband by 2030. The press release section of the IOD website has a copy of the full report.

Starting down a 10 Gbps for all by 2030 path now, would give 14 years to complete the roll-out and actually fits in with what we believe is a likely timeframe for Gigabit and faster services being the norm. So while a 10 Gbps may sound extravagant and impossible it is not impossible just might not will start to take shape until 2025 and onwards.

The question for the whole political and business establishment in the UK is whether this gradual roll-out should take over from existing targets which while often seen as unambitious are resulting in an almost ubiquitous level of coverage as the projects progress. Or put another way, which is more important getting close to over 95% coverage at speeds of 24 to 50 Mbps, or rolling out 5 to 10% of 10 Gbps capable infrastructure per year?

In the coverage we are seeing complaints that places like London are suffering and is only 26th in the league table of European capitals, but we suspect and until we see the report we believe this is based on the old and no longer available NetIndex site that in many European countries was deeply flawed due to its use of Geo-IP e.g. it would for some UK towns claim average speeds above 100 Mbps when the fastest widely option was up to 76 Mbps VDSL2. This measure also reflected what people have actually chosen to buy, rather than what was available to them.

The killer application in the home market to data has proven to be video streaming, which suggests that bandwidth demands might level off to some extent once every individual is already streaming content live. Certainly this plays heavily in research by groups like the Broadband Stakeholder Group.

The Virgin Media cable network may not be able to do 10 Gbps today to an individual, but DOCSIS 3.1 and further enhancements suggest that their infrastructure across almost half the UK might be able to deliver this sort of speed with enhancements over the next decade and Openreach has shown 10 Gbps working over its GPON network (existing deployment shares 2.5 Gbps in a GPON segment, 10 Gbps utilises XG-PON). Then there are those who back a point to point FTTH/FTTP roll-out which can also do 10 Gbps today, and its just a case of being able to afford to fit the correct optics and routing hardware.

So which is more important an almost communist zeal to get everyone to a basic level of broadband coverage speed via things like the Universal Service Obligation, or aiming for a mine is bigger than yours game, where resources are concentrated on a long term goal with some waiting another decade for any major improvement?

Visions are wonder inspiring events but in the cold light of day they have a tendency to become gravy trains a little like projects such as HS2 which are seen as being needed to address the high-speed train gap. So is there a broadband gap that is not being addressed by the commercial market already? Before answering remember that CityFibre has its dark fibre network expanding rapidly and is forming a network of Gigabit cities where business can already order affordable Gigabit or faster connections if they need them.

The UK does have a Fibre to the Home gap, and in theory the changes Ofcom is mandating may help to address that, but even if Ofcom mandated free access to Openreach ducting it needs investors willing to spend the money to actually do the work and compete with Openreach and Virgin Media.

The full report makes for an interesting read and does welcome the USO work but and suggests that for the future of UK Broadband and the business economy to remain bright Ofcom may need to force access to Openreach duct and poles at below cost and roll-out of a 10 Gbps capable network should start in 2017/2018.

"Set a mid- to long-term target of 10 Gbps
across the UK by 2030

The Government’s USO of 10 Mbps by 2020 is a
welcome aim and it is likely to be successful. But
it is time to be more ambitious , and the relaxed
approach the industry took towards meeting the
target when it was announced indicates its lack of
the necessary ambition. Technological innovation
is not a linear progression but an exponential
one. A longer-term target would future-proof the
network to ensure that British companies are able
to innovative in new industries made possible by
higher-speed broadband, radically increase the
global competitiveness of UK firms, encourage
foreign investment, and cement our place as a
leader in the digital economy."

Extract from Policy Recommendation by IoD

The question is really does the UK allow the market to determine where Gigabit and faster networks are available or do the politicians intervene now and agree a policy that might outlast the three or four parliaments in its lifetime and also insulate any build activity from the vagaries of the global economy.

Comments

Posted by
chilting 9 months ago
So basically the IoD is saying that they want all the copper network replaced with fibre by 2030.
Have they mentioned how this is going to be achieved?

Posted by
jumpmum 9 months ago
I can see the need for 10Gb for businesses especially those supplying contant to the rest of the web but have difficulty seeing the need for a consumer product until someone develops matter transmission or BB. Businesses run from home may have a requirement for 1G but they should be covered by FTTPoD ( Tax deductable?). Larger businesses wanting 10Gb can already buy it from multiple vendors, just not at £50 /month

Posted by
TheEulerID 9 months ago
Fascinating to read a body representing business apparently not dealing with the economic model required to deliver such a network. Or are they expecting the state to step in and pay for it?

Posted by
WWWombat 9 months ago
Three things I note from the report...

1. The IoD state that the 10Mbps USO will be a success because it doesn't set targets based on business needs. But the IoD then sets the 10Gbps target without reference to any need either.

2. The IoD don't say who should pay for the rollout, but indicate that auctions should be designed to pull in new entrants. Does an auction imply government funding?
...

Posted by
WWWombat 9 months ago
3. The IoD believes PIA should be offered at below-cost rates. Does the government pay the difference? Or does Openreach just suck it up? Can BT make use of the same below-cost rates, or are they meant to compete by being hamstrung through their own investment?

Posted by
WWWombat 9 months ago
Otherwise, the IoD pose an interesting question here - Should we, as a nation, set a policy for FTTP for N years time?

I'd hope for better arguments about why, or why not, but it is fair to ask the question.

Posted by
adslmax 9 months ago
We don't need 10 Gbps but 1 Gbps is more than enough

Posted by
leexgx 9 months ago
100/100 would do me until 50k resolution tv's comes out

Posted by
TheEulerID 9 months ago
@WWW

I found it difficult to believe that the IoD were suggest OR should charge below costs for infrastructure access, but that is indeed what they do say. I would have though any such move by the regulator could be subject to judicial review. Cross-subsidies for USO is one thing, equivalence is another, but outright subsidy of a competitor?

"Ofcom should consult on how to significantly
lower Physical Infrastructure Access charges
to ducts and poles, if necessary lower than
BT’s costs"

Posted by
TheEulerID 9 months ago
@WWW

Also, in the conclusion, the proposal for an auction for 10Gbps infrastructure makes it sound like an auction for mobile bandwidth. However, it clearly isn't as the proposal appears to be for a tendering process as a sort of "ultra-fast" BDUK at 10Gbps for all. So an open ended commitment for public funds?

In truth, an astonishing thing for an organisation representing business directors to demands.

Posted by
PaulKirby 9 months ago
@adslmax
I agree 1Gbps should be enough, but due to where websites are always adding more and more content every year after year, so who know what speeds we will need in say 10 to 14 years time.

But I still think atm 1Gbps should be fine for a while to come.

Posted by
WWWombat 9 months ago
@PK, @adslmax

I think the reason they call for 10Gbps is because it cannot be achieved by copper. It is really a call for FTTP infrastructure ... and, of course, we can then put any speed we feel like on it.

They're also ignoring the engineering smarts that brought G.Fast, and what it might bring in the future. And whether it meets needs.

And are ignoring that the deployment of FTTC now, and G.fast in the future, brings fibre ever closer.

Posted by
WWWombat 9 months ago
@Euler
That's my read of what they suggest too. I agree it is quite astonishing - FTTP subsidised jointly by government and Openreach.

Posted by
PaulKirby 9 months ago
@WWWombat
This is true, I know Denmark achieved 43Tbps down a single strand of fibre :P
I say lets go towards G.FAST by installing fibre up to the last point before it enters the home, then once that has been done, then got over to FTTP.

Posted by
TheEulerID 9 months ago
@WWW

It's almost like they don't believe in private enterprise isn't it?

I'd much rather that the work was towards a sustainable, economic model for providing BB rather than what looks like a subsidy model. For areas that are commercially unviable, some combination of geographic pricing flexibility, internal cross-subsidy and USOs for essential social needs.
No doubt there could be some room for limited public intervention. However, this stuff has turned a vision into an hallucination.

Posted by
TheEulerID 9 months ago
Incidentally, there's a rather silly bit of maths wrong in that report

"In the UK, the penetration of FTTP is just 0.003%, comparing extremely unfavourably with other European countries"

Now there is no doubt that penetration is lower, but 0.003% of 24 million premises is just 720 premises. I rather think somebody has put the decimal point in the wrong place...

I'd much rather that the work was towards a sustainable, economic model for providing BB"

Private enterprises and their commercial models have failed in providing any significant fibre broadband in the UK. Short of re-nationalising BT it should just be bypassed, and PIA helps in this. You won't expect BT to act like a genuine business, and it already is unable to serve 1/3 of the country with commnercially viable VDSL, let alone fibre broadband!

Posted by
RuralWire 9 months ago
Right, so the IoD are accusing the Government of a "poverty of ambition" regarding the proposed 10Mbps USO by 2020. How many telecommunications companies are fully supporting the IoD in their valiant 10Gbps quest? To the best of my knowledge, not one. What's more, the IoD have not been entirely forthcoming in their report on whether rural homes and businesses would be included within the walls of their New Jerusalem. A USO is about a basic, reasonably affordable service and consequently is not "a distraction" from pursuing the cutting edge of internet access as the IoD have claimed.

Posted by
RuralWire 9 months ago
Whilst on the subject of the USO and the content of the IoD report, perhaps someone should let the IoD know that the current USO is not 2Mbps (that's the USC). The current USO is in fact a woefully meagre and wholly inadequate 28.8Kbs (0.0288Mbps). That should shock and horrify the IoD in equal measure.

Posted by
GMAN99 9 months ago
JNeuhoff (GNewton) Why is it BT's fault if some areas are not commercially viable? Is it BT'S fault they are not commercially viable for other operators such as virgin?

Posted by
Somerset 9 months ago
@JNeuhoff - do you know the income per line that Openreach gets and the payback period?

Posted by
JNeuhoff 9 months ago
@FibreFred - GMAN99: Are you now trolling over here at ThinkBroadband? First make up your mind whom you are talking to! I remember GNewton and his extreme views on commercial telecoms, with which I don't agree. But I also remember your constant bashing of others, and your rudeness on ISPReview.

Posted by
JNeuhoff 9 months ago
@Somerset: I'll take your point about the long payback period of fibre investment. The major telecoms in the UK, e.g. BT or Virgin, aren't able to do longterm fibre deployment. It boils down to 2 alternatives:

1) A lot of government funding and only one fibre access infrastructure.
2) Or infrastructure competition, including better PIA access.

Posted by
chilting 9 months ago
To put things into perspective, the reasons that BT got BDUK funding were to speed up deployment of FTTC and to cover areas that were not economically viable.
To suddenly say that public money should be used for full scale deployment of FTTP is ludicrous. This is something that should be left to the commercial sector, not just BT but other wholesale providers like City Fibre.

Posted by
JNeuhoff 9 months ago
@Somerset: VM has done coax cable which it sees as longterm investment. And BT has done some copper VDSL which is its version of a longterm solution. None of them will do a widespread fibre rollout any time soon. The points made by the IoD are mainly about a widespread replacement of copper with fibre which would have made sense in the long run, but, as I said, none of the major telecoms are capable to do so in the UK.

Posted by
Somerset 9 months ago
@JN - why do you say not capable? When will VM become unusable?

Posted by
andrew ( staff member)
9 months ago
Oddly Virgin Media is using RFOG i.e. FTTH for some of the new build network areas and the Openreach network is building out ready for a switch to GPON FTTH at a future point. The VDSL2 roll-out does include extra work to allow for G.fast and FTTH enhancements at a later date.

Posted by
TheEulerID 9 months ago
The evidence in the UK is that the great majority of the population buy on the basis of price to meet their functional needs and aren't greatly interested in paying a premium for something that is of little gain. Many are happy enough with their low-cost LLU ADSL service.

It is against this background, that both VM & BT will invest on technologies (like DOCSIS, VDSL and g.fast) that can be exploited relatively quickly and start earning a return. Speculative developments on universal FTTH without a sound business model are a tricky sell to investors. Many lost fortunes on cable TV network.

Posted by
TheEulerID 9 months ago
It's going to be a particularly hard sell to put a third fibre network into areas serviced by OR and VM. The DOCSIS & VDSL networks are sunk costs and FTTH might have to compete with their marginal costs. It makes investment cases extremely difficult (hence we see altnets targeting smaller concentrations of poorly served, yet viable communities such as larger, affluent villages).

It seems to me the growth of patchwork FTTH is what we might expect. The idea that there will be "10G for everybody" is, frankly, ludicrous and a poor use of economic resource.

Posted by
CarlThomas 9 months ago
Virgin Media have a pretty clear strategy going forward. RFoG is highly likely to become the build of choice in the near future with the exception of infill and extensions.

There's a bunch of it coming not that far from me.

Existing and new HFC will be upgraded per https://www.youtube.com/watch?v=bOAjzKY51-I&ab_channel=SCTE-SocietyforBroadbandProfessionals

Posted by
CarlThomas 9 months ago
As far as Virgin's past strategy goes when the networks VM are comprised of were being built HFC was the only real option. Had FTTP been an option they'd have built with that instead.

What's around at the time is a major decision-maker. Japan, Korea, Sweden are FTTP-heavy because that was the only solution for where they wanted to be. There were no other options. Different story by the late-2000s.

Posted by
CarlThomas 9 months ago
Last one.

Regarding VDSL being a long-term strategy for Openreach, it is not. They are as aware as anyone that it is a stop-gap, hence why they built the network with the ability to re-use about 50% of the capital expenditure spend for deeper fibre services.

I'm sure we can find plenty of ways to criticise these companies without making things up, right? :)

Posted by
TheEulerID 9 months ago
Indeed, VDSL is clearly not the BT strategy which is for a gradual shortening of copper loop lenghts by pushing fibre nodes further into the network but only as/when commercial considerations, competition and so on dictate. It's about cost effective investment.
I think there is scope for them to be a bit more optimistic, but it requires investors to be convinced.

Posted by
CaptainHulaHoop 9 months ago
I guess regulatory stability and assurances that the investments will pay back go in to consideration as well. Threat of being broken up probably didn't help. Also they need to make sure they are not going to be under the same margin squeeze for fibre based products that they are subjected to on LLU

Posted by
CaptainHulaHoop 9 months ago
In a market where people seem to want cheap price above all else even though they still expect leased line performance it's a hard act to balance

Posted by
chilting 9 months ago
There must be a point in the future when BT will want to break up its business. When the profitable parts of the network are converted to G.Fast or FTTP it will be left with the unprofitable rump of its copper network. To compete in the modern world big business is very quick to prune out the unprofitable parts of its business.
Maybe even now some at BT would be pleased to see the back of Openreach.

Posted by
GMAN99 9 months ago
I don't think they would want to ditch Openreach to get rid of the unprofitable areas but I'm sure they would like to see the back of the Voice USO

Posted by
chilting 9 months ago
@GMAN99
Is that not that the same thing?

Posted by
TheEulerID 9 months ago
@chilting

There's no chance that BT will want to get ris of the copper network, but what they have mooted is being relieved of the obligation to provide a voice line. The principle is that voice services would be provided via BB. On this scenario, only the subloop would remain (unless it's FTTH of course).
Such a think would enable most local exchanges to be closed and E-side copper could be recovered. It would, of course, mean MPF/WLR would go to. However, it wouldn't be for 10+ years and heaven knows what might happen by then.

Posted by
GMAN99 9 months ago
I'm saying I expect they would want to keep openreach (why not) but not have to keep on the loss or break even exchanges that are only there because of the uso. Can't see it happening though

Posted by
comnut 9 months ago
I think the reason for all this '10Gbps talk' is that Japan has just got it going...

In Singapore, Singtel announced a 10 Gbps Home broadband service in May 2015.

Posted by
comnut 9 months ago
But then you can DREAM about being as rich as japan (most do not think twice about paying the equivalent of £10 for a cup of coffee)

The same as dreaming about getting 10 Gbps Home broadband in your lifetime... :) :/

Posted by
chilting 9 months ago
@TheEulerID
The problem for BT is that as their monopoly erodes so does their profitability. Other providers open new networks in the most profitable areas and BT will be caught in the trap of competing with them while trying to maintain their outdated and expensive copper network throughout the UK.
It may be better for them to keep part of their wholesale business and split off Openreach.

Posted by
GMAN99 9 months ago
Chilting if that becomes a problem are you not just shifting the problem won't openreach have the same issue?

Posted by
chilting 9 months ago
@GMAN99
Yes, but if BT sold Openreach the rest of the group would remain intact and could compete on even terms with the new players.
Openreach could become a bit of a dead duck and may even in the much longer term have to be bailed out by the state.

Posted by
CaptainHulaHoop 9 months ago
@chilting
I'd wish the baord at BT or a separated openreach good luck selling that strategy to their investors. Doesn't really give them much incentive to invest anything in to the network at all either

Posted by
comnut 9 months ago
BT are a victim of their own laziness, too comfortable with having almost no competition...
I have helped friends, where BT seem to not really care about 'keeping a customer'..
A good way to get good deals from sky is to threaten to leave!!! :)

Posted by
CarlThomas 9 months ago
@Comnut I'm not sure if throwing discounts at customers who threaten to leave is great service.

If Sky can actually afford to offer lower prices they should offer them across the board, not just to people who phone in to haggle.

We have the most expensive pay TV in Europe thanks to Sky - check out the pricing of the Liberty Global family elsewhere.

Posted by
comnut 9 months ago
Its not me, SKY and many other companies have a whole 'retentions' department... :)
'Liberty Global' ?? In UK, only VM and Vodafone are part of them..

That leaves all the other desperately holding on to customers by 'making deals'...

Posted by
comnut 9 months ago
Europe is lucky they dont have a huge corporation like BT (very slow bureaucracy) that business people THINK is doing well...

I am amazed sometimes, seeing clueless politicians spinning, and NOT investigating how france does it..

Posted by
CarlThomas 9 months ago
Vodafone are not a part of Liberty Global. As I said check out the costs of pay TV elsewhere in Europe through other parts of Liberty Global.

I'm aware these companies have retentions departments. It's rather sad actually that they see fit to offer support and customer services through outsourced centres abroad and then have UK people throw discounts at dissatisfied customers as a result of that substandard service.

Offer a decent service, let those who still want to leave go and have competition lose money on them instead.

Posted by
CarlThomas 9 months ago
As far as Europe goes I've no idea what you're talking about when you say they've no huge corporation like BT.

Have you looked at France Telecom, Deutsche Telekom and Telefonica recently just to name three?

BT are doing well from the point of view of business people. Their POV is somewhat different from yours, their data doesn't include Trustpilot reviews.